HKSAR v. LAU NGAI CHU

CACC 228/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 228 OF 2001

(ON APPEAL FROM DCCC 127 OF 2001)

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REASONS FOR JUDGMENT

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Hon Lugar-Mawson J: (giving the judgment of the Court)

1. The Applicant, Lau Ngai Chu, was convicted on 26 June 2001, after trial by Deputy Judge W. C. Li in the District Court, of two charges of Conspiracy to Defraud, contrary to Common Law and punishable under s. 159C of the Crimes Ordinance, Cap. 200. He was sentenced to concurrent terms of 3 years' imprisonment on each charge.

2. The Applicant sought leave to appeal against his convictions and sentence. Mr Francis Burkett, of counsel, represented him at the hearing.

Facts

3. The Applicant was employed as a sales assistant by Hutchison Telecommunications Ltd (Hutchison) at its shop at Amoy Plaza, Ngau Tau, Kok, Kowloon. Customers could purchase mobile telephones from Hutchison's by producing their identity card and paying either in cash or by credit card. The provider of the cash or the credit card need not necessarily be the person in whose name the purchase was made. Hutchison's had a policy of limiting purchases of mobile telephones to two per person and they maintained on their computer records a list of 'blacklisted' persons to whom sales of mobile telephones were not to be made by reason, among other things, of either having already purchased two mobile telephones or having a bad credit record. Chan Siu Fai, the 2nd defendant at trial, was on this blacklist.

4. Shortly before the beginning of November 1999 a third party arranged a meeting between Chan Siu Fai and the Applicant. At the meeting it was agreed that the Applicant would breach Hutchison's 'two mobile telephones per customer' sales policy and permit Chan Siu Fai to obtain mobile telephones by using other peoples' identity cards to make the purchases. The Applicant was to receive a reward of $500 for each purchase.

5. False credit cards were used to effect 33 such purchases. In respect of each purchase the identity card produced was checked on Hutchison's computer and found not to be on the 'blacklist.' Then the false credit card was passed through the card verification machine to obtain approval of payment by credit card from the credit card centre.

6. When the police interviewed Chan Siu Fai after his arrest, he said that the Applicant did not know that the credit cards used were false. Later, Chan Siu Fai pleaded guilty at trial and gave evidence for the prosecution and then said that the Applicant knew that the credit cards were false.

7. Angela Law On Kei, the 2nd prosecution witness, was the manageress of the shop. She said in evidence that she had not seen the documentation relating to the 33 purchases before it was sent to Hutchison's records department. Neither did the Applicant make any representation to her about any of the 33 purchases. The 33 purchases by credit cards were effected electronically by the card centre's computer when the cards passed through the validation machine, no representations were made to a living human being.

8. The Applicant was arrested on 8 January 2000. He assisted the police to arrest Chan Siu Fai. In cautioned interviews he maintained that he did not know the credit cards were false; that he had not checked them because they had been approved by the validation machine and that the payments of $500, which he admitted receiving, were only for his allowing Chan Siu Fai to obtain mobile telephones in breach of Hutchison's two mobile phones per customer sales policy.

9. The total loss to Master Card in respect of the use of the false credit cards was $87,880; the total loss to Visa Card was $136,960.

The grounds of appeal against conviction

10. Mr Burkett argues two grounds of appeal against conviction. Firstly, that there was a material irregularity, in that the prosecution failed to disclose relevant material in its possession to the defence. Secondly, that there was an error in law in that the prosecution failed to state in the Particulars of Offence on the District Court Charge sheet the acts by which the alleged agreement to defraud MasterCard International Inc. and Visa International Inc. was to be carried out.

The 1st ground of appeal

11. The circumstances giving rise to the first ground of appeal arose in this way. At the end of the trial the prosecution produced to the court an exhibits disposal list. At entry number 211 was the entry '10 boxes of Hutchison Telecom. Co. CCTV tape.' The prosecution had not produced any CCTV tapes in evidence and, although the prosecution, prior to trial, had served a list of unused materials on the defence, no CCTV tapes were on that list. The first time the defence became aware of the existence of CCTV tapes in the prosecution's possession was when the exhibits disposal list was presented to the court.

12. Mr Burkett argued that had the defence known of the existence of the CCTV tapes prior to the trial, they would have obtained copies and viewed them in order to determine whether or not any of them assisted the defence case. Parts of 3 of them would have been adduced in evidence by the defence at trial, for the following reasons:

(1) To establish that neither the appellant, nor other Hutchison staff, habitually checked or scrutinised the credit card payment slips after customers had signed them. And in particular that the Applicant did not check the credit card slips after they had been signed in respect of such transactions as are recorded on CCTV tapes and upon which the prosecution relied as involving false credit cards. In his Reasons for Verdict the Deputy Judge described the appellant's answers in interview in respect of these matters as 'waffling'. A view of the CCTV tapes would have prevented any such description of this part of the interview and the consequent adverse inferences.

(2) To establish that the Applicant conducted the transactions, which the prosecution claimed to be fraudulent, in the same way as he conducted any other customer's transaction. And in particular to establish that the Applicant demonstrated the use of the mobile telephone to the allegedly fraudulent customer, it being unlikely that a person party to the alleged conspiracy would do such an act, and:

(3) To demonstrate that there were transactions (in which false credit cards were used) at which the 2nd defendant was not present and that the circumstances of them were such that the appellant would not have known whether or not the credit cards were false. Had the CCTV tapes been adduced in evidence the Deputy Judge would have been unable to develop the argument set out in his Reasons for Verdict that, in respect of all the transactions, 'it is only common sense' that the appellant knew that the 2nd defendant was paying with false credit cards.

13. Ms Mary Sin, counsel for the Respondent, told us that the Government Counsel who advised on the prosecution had been aware of the existence of these CCTV tapes, but had discounted their relevance, as the faces of persons depicted in them were indistinct. Clearly advising counsel had not addressed his mind to the need for disclosure of their existence to the defence.

14. In Hong Kong we have no legislation governing disclosure analogous to the provisions of Part 1 of the English Criminal Procedure & Investigations Act 1996. We are, however, governed by the common law rules of disclosure, which owe their origin to the elementary right of every defendant to a fair trial.

15. At one time the prosecution's duty of disclosure was not thought to be very wide-ranging. In Dallison v Caffrey [1965] 1 QB 348, Lord Diplock observed that the proposition that it is the duty of the prosecution to place before the court all the evidence known to him, whether or not it is probative of the guilt of the accused person, was erroneous. As he put it, at pages 375 - 376:

"A prosecutor is under no such duty. His duty is to prosecute not to defend. If he happens to have information from a credible witness which is inconsistent with the guilt of the accused, or, although not inconsistent with his guilt, is helpful to the accused, the prosecutor should make such witness available to the defence."

16. Lord Denning, in the same case, described the prosecution's duty in these terms, at page 369:

"The duty of a prosecuting counsel, as I have always understood it, is this: if he knows of a credible witness who can speak to material facts which tend to show the prisoner to be innocent, he must either call that witness himself or make his statement available to the defence. It would be highly reprehensible to conceal from the court the evidence which such a witness can give. If the prosecuting counsel or solicitor knows, not of a credible witness but a witness whom he does not accept as credible he should tell the defence about him so that they can call him if they wish. Here the solicitor, immediately after the court proceedings [for committal before the magistrates], gave the solicitor for the defence the statement of Mr and Mrs. Stamp; and thereby he did his duty."

17. However, nearly 30 years later, in R v. Ward (Judith) [1993] 1 WLR 619, at page 645, the English Court of Appeal adopted the words of Lawton LJ in R v. Hennessey (Timothy) (1978) 68 Cr. App. R. 419, where he said, at page 426:

"...those who prepare and conduct prosecutions owe a duty to the courts to ensure that all relevant evidence of help to an accused is either led by them or made available to the defence."

The court went on to observe:

"We would emphasise that 'all relevant evidence of help to the accused' is not limited to evidence which will obviously advance the accused's case. It is of help to the accused to have the opportunity of considering all the material evidence which the prosecution have gathered, and from which the prosecution have made their own selection of evidence to be led."

18. The effect of the decision in Ward was to widen the scope of the duty from that which had formerly been thought to apply. However the instances of non-disclosure with which Ward was concerned related mainly to scientific evidence obtained during the investigation. The court explained the rules of disclosure relevant to the case in this way, at page 674:

"An incident of a defendant's right to a fair trial is a right to timely disclosure by the prosecution of all material matters which affect the scientific case relied on by the prosecution, that is, whether such matters strengthen or weaken the prosecution case or assist the defence case. This duty exists whether or not a specific request for disclosure of details of scientific evidence is made by the defence."

19. The principle was taken further in R v. Keane [1994] 1 WLR 746 where the English Court of Appeal court was concerned with the problems that can arise when a trial judge is invited by the defence to order disclosure of documents and is invited by the Crown in the public interest to refuse such disclosure. After noting that the court must then conduct a balancing exercise. Lord Taylor of Gosforth C.J. said, at pages 751H -752C:

"If the disputed material may prove the defendant's innocence or avoid a miscarriage of justice, then the balance comes down resoundingly in favour of disclosing it.

But how is it to be determined whether and to what extent the material which the Crown wish to withhold may be of assistance to the defence?

First, it is for the prosecution to put before the court only those documents which it regards as material but wishes to withhold. As to what documents are 'material' we would adopt the test suggested by Jowitt J. in R v. Melvin (unreported) 20 December 1993. The judge said:

'I would judge to be material in the realm of disclosure that which can be seen on a sensible appraisal by the prosecution: (1) to be relevant or possibly relevant to an issue in the case: (2) to raise or possibly raise a new issue whose existence is not apparent from the evidence the prosecution proposes to use: (3) to hold out a real (as opposed to fanciful) prospect of providing a lead on evidence which goes to (1) or (2).'"

20. That, as we understand it, encompasses the common law duty of disclosure. Here, had the advising counsel addressed his mind to the issue of disclosure, he would - or should - have concluded that the tapes were relevant, or possibly relevant, to an issue in the case, or held out a real prospect of providing a lead on evidence going to such issue and, regardless of what view he had of their quality, directed that they be disclosed and made available to the defence.

21. We are satisfied that the 1st ground of appeal has been made out.

The 2nd ground of appeal

22. Whenever an offence of conspiracy to defraud is charged, the prosecution is required to particularise the overt acts by which it is alleged the conspirators agreed that the agreement to defraud was to be carried out. This is required so that both the defence and the judge know the nature of the prosecution case precisely. It is also required to stop the prosecution from shifting their ground during the course of the case without the leave of the trial judge and the making of an amendment. (see: R v. Landy (1981) 72 Cr. App. R. 237.)

23. The overt acts relied upon by the prosecution in the particulars of offence of both charges were:

"...by dishonestly falsely representing to Law On-kei, Angela of Hutchison..that...[the credit cards]...were good and valid credit cards."

24. Not only were there no representations, false or otherwise, communicated to Angela Law, or to Hutchisons, the alleged fraud on MasterCard and Visa could never have been the result of any representation made to either Angela Law, or to Hutchisons, assuming one had ever been made. It follows that the Deputy Judge misdirected himself when holding in his Reasons that:

"I do not really think it matters whether the defendant was making false representations directly to Miss Law or to this Hutchison shop of which Miss Law was in charge."

25. It also demonstrates that he failed to ask himself whether the particularised overt acts were ones that could have resulted in the alleged fraud being carried out.

26. We are satisfied that the 2nd ground of appeal has been made out.

Decision

27. By reason of these two matters we took the view that this appeal had to be allowed. We therefore treated the application as the hearing of the appeal itself and quashed the convictions.

Re-trial

28. After hearing counsel on the question of a re-trial, we exercised our powers under Sections 83E and 83F of the Criminal Procedure Ordinance and made an order for a re-trial upon the following two charges:

" 1st Charge
Statement of Offence

Conspiracy to defraud, contrary to Common Law and punishable under section 159C(6) of the Crimes Ordinance, Cap 200.

Particulars of Offence

Lau Ngai-chiu between October 1999 and 24 December 1999 conspired with Chan Siu-fai and with other persons unknown to defraud MasterCard International Incorporated by the fraudulent use of false credit cards for purchases of portable telephones at the Hutchison Shop at Amoy Plaza, Ngau Tau Kok, Kowloon.

2nd Charge
Statement of Offence

Conspiracy to defraud, contrary to Common Law and punishable under section 159C(6) of the Crimes Ordinance, Cap 200.

Particulars of Offence

Lau Ngai-chiu between October 1999 and 24 December 1999 conspired with Chan Siu-fai and with other persons unknown to defraud Visa International Incorporated by the fraudulent use of false credit cards for purchases of portable telephones at the Hutchison Shop at Amoy Plaza, Ngau Tau Kok, Kowloon."

Costs

29. We ordered that the Applicant be granted his costs, limited to (i) the contribution he made to the Director of Legal Aid and (ii) the costs incurred before he was granted a Legal Aid Certificate, such costs to be taxed if not agreed.